7 Tips for Doing Inventory Management for Your Business
It is very important to evaluate your business regularly to ensure that you are on the right track to success, and one of the most important parts of your business is inventory management.
Is your inventory management running well? Are you always able to meet the demand for products from your customers? If you have a problem with your supply management, these 7 tips can help you solve it.
1. Refine Your Projection
Accurate projection (forecasting) is very important. Your projected sales calculation should be based on factors such as historical sales figures, market trends, growth and economic forecasts, promotions, marketing efforts, and so on.
2. Use the FIFO Method
Use a FIFO (First In, First Out) approach. Items must be sold in the same chronological order they were purchased or manufactured. This is especially important for perishable products like food, flowers, and makeup. It’s also a good idea for items that can’t be stored too safe because they can break, or are out of date and can’t be sold. The best way to implement FIFO in a warehouse is to add new items from the back so that the old product is at the front.
3. Identification of Late Stocks of Goods
Identify slow turning stocks. If you have stock that hasn’t sold at all in the last 6 to 12 months, it may be time to stop selling that item. You can also consider various strategies to get rid of that stock – such as discounts or special warehouse wash promotions – because excess stock will only eat up space and capital.
4. Audit Your Stock
Even with the best inventory management software, you still have to do manual audits periodically to make sure that the stock items you have match what is on paper.
Perform audits every six months or once a year, or according to your needs. Incompatibility of data with reality will cause many problems for your business, for example adding stock for items that actually still have a lot of stock, or conversely, not adding stock for items that are out of stock.
5. Perform Maintenance of Equipment
Machines that play an important role in your business may be damaged, and damaged machines can be expensive to repair. Regularly monitoring the condition of your equipment and its parts is essential to understanding its life cycle, so you can take precautions before problems arise.
6. Quality Control
No matter what industry your business is in, it’s important to make sure that all of your products look great and function well. You can have the employee perform a quick check during the stock audit that includes a checklist for signs of damage and the correct product labeling. What happens if a consumer who buys from you receives a defective or damaged item? Of course, they will be very disappointed.
7. Hire A Stock Controller
Stock control is used to show the amount of inventory you have on hand at any given time and applies to all items from raw materials to finished goods. If you have a lot of inventory, you may need one person to be responsible for it. The stock controller processes all purchase orders, takes delivery, and makes sure that everything arrives exactly as ordered.
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